Income-Generating Properties – Guaranteed Investments with Steady Returns
Certified Valuation for Each Property – Buy with Confidence and at a Fair Price
Real Estate Investment Experts – Guide You to the Best Choice
Browse an exclusive collection of income-generating investment buildings and homes in Kuwait’s most prestigious areas.
How do I calculate the return on investment (ROI) for a property?
Real estate return on investment (ROI) is calculated using a simple equation, but several factors must be taken into account to obtain an accurate picture. The basic equation is: Annual return = (Annual net income ÷ Total investment cost) x 100. Annual net income is calculated by subtracting all annual expenses (maintenance, insurance, management, taxes, if applicable) from the total annual rent.
The total investment cost includes the property purchase price + registration fees + initial renovation or maintenance costs + any legal fees. For example: If you purchased a building for 500,000 dinars and earned an annual rent of 35,000 dinars, and your annual expenses were 5,000 dinars, the return = (30,000 ÷ 500,000) x 100 = 6% per year.
But there are other important metrics: occupancy rate (the percentage of time the property is rented), long-term capital appreciation, and monthly cash flow (the difference between rent and installments if financing is available). A good property generates a rental return of 5-8% annually, plus a 3-5% annual appreciation in value in developing areas.
At Awad Kuwait, we help you accurately calculate the expected return before purchasing any investment property. We offer certified property appraisals that determine the true value and expected rent, and we also provide third-party property management services that maximize your returns and minimize vacancy periods. Our 30 years of experience ensures that you choose the property that achieves the best investment return.
What’s the difference between buying a house or an investment building?
The difference between buying a house and an investment building lies in the goal, the financial return, and the required investment size. A house is typically purchased for personal residence or as a single unit, meaning a single rental income but with simple management and fewer maintenance responsibilities. A house is suitable for families or small investors looking for stability and a medium-sized investment without administrative complications.
On the other hand, an investment building contains several apartments or units that can be rented out separately, providing multiple and more stable income streams. If one unit becomes vacant, the remaining units continue to generate income. Buildings offer a relatively higher return on investment, but they require more capital and more professional management to manage multiple tenants and maintain multiple levels of maintenance.
Financially, buildings typically generate an annual return of 6-8% of the property value, while rental homes may generate 4-6%. However, buildings require professional management to maintain occupancy rates and quality tenants. At Awad Kuwait, we offer comprehensive third-party property management services for investment buildings, and we help you with a certified property appraisal before purchasing to ensure you’re investing wisely. Our 30 years of experience enables us to guide you to the most appropriate option based on your budget and goals.
